Urals, Gazprom Sign Dulisma MoU

Urals Energy has signed a memorandum of understanding (MoU) with Gazprom stating that both companies have agreed to cooperate in future production and marketing of natural gas from the Dulisma field, a Russian field owned by Urals.

According to the MoU, Urals will ensure that the Dulisma field is developed according to the company's stated development plan and is scheduled to be on commercial production in 2008-2009. When this occurs, Urals and its affiliates or subsidiaries will sell natural gas from the Dulisma field to Gazprom.

The parties will also consider cooperation in production of LPG products plus other mutual infrastructure projects, such as pipelines and power generation.

The MoU also states that both parties may consider cooperating in other mutually beneficial ways.

The Dulisma field is one of Urals Energy's major assets with gas reserves of 1.9m tcf (condensate 46 mmbo and gas 323 mmboe reserves) all now fully booked as proved and probable. The field also enjoys a 10-year tax holiday for the period between 1 January 2007 and 31 December 2016. This tax holiday is estimated to produce savings of approximately $308 million over the 10-year period and further exemplifies the importance of this asset to Urals Energy.

Leonid Dyachenko, Chief Executive of Urals Energy, commented:

"Urals Energy is proud to be one of a select number of companies to sign an agreement with Gazprom and we look forward to working with them to further develop local infrastructure and unlock the potential of the Irktursk region.

"This landmark agreement is a significant milestone for Urals and its key asset and with this agreement we have now delivered on all stated plans for this field.

"We are now focused on delivering to our operational timeline and look forward to entering this attractive gas market."